(Corrects first bullet to say "130,000 jobs", not "130,0000 jobs")
* U.S. economy adds 130,000 jobs in August
* Average hourly earnings gained 0.4%
* Futures up: Dow 0.34%, S&P 0.37%, Nasdaq 0.29%
By Uday Sampath Kumar
Sept 6 (Reuters) - U.S. stocks were set to open higher on Friday as China rolled out a stimulus plan to shore up its flagging economy and weak jobs data cemented expectations of an interest rate cut by the Federal Reserve later this month.
China's central bank said it would reduce the amount of cash that banks must hold as reserves, releasing a total of 900 billion yuan ($126.35 billion) in liquidity.
Stock index futures initially pared gains after the Labor Department's nonfarm payroll data showed that the U.S. economy added 130,000 jobs in August, below expectations of a gain of 158,000, according to a Reuters survey of economists.
However, they recovered quickly as the data did not change expectations on the path of rate cuts this year, with traders betting that the Federal Reserve would follow July's interest-rate reduction with two more rate cuts this year.
"The market is going to be in this weird state of bad news is good news," said Nela Richardson, investment strategist at Edward Jones in St Louis. "This low number points in the direction of a cut later in the month. Every piece of data now leads to the Fed."
Market participants are currently expecting a quarter percentage point cut at the Fed's mid-September meeting. They will look for further clues on the monetary policy when Fed Chairman Jerome Powell speaks at the University of Zurich later on Friday.
The employment report showed average hourly earnings gained 0.4% last month, the largest increase since February.
This comes after a clutch of economic data from earlier this week provided mixed views on the U.S. economy amid the drama of a drawn-out trade war with China.
Data showing a contraction in U.S. factory activity in August dampened markets on Tuesday, but diffusing political tensions in Hong Kong and hopes of a de-escalation in U.S.-China trade tensions helped boost stocks to one-month highs later in the week.
Markets were also driven on Thursday by strong growth in private payrolls and an accelerating services sector, with the benchmark S&P 500 rising 1.3% and closing just 1.75% away from its record high in July.
At 9:08 a.m. ET, Dow e-minis were up 90 points, or 0.34%. S&P 500 e-minis were up 11 points, or 0.37% and Nasdaq 100 e-minis were up 23 points, or 0.29%.
Among stocks, Marathon Oil was down about 2% after Goldman Sachs cut its price target on the stock. Facebook Inc also fell marginally following a Wall Street Journal report that state attorneys general are formally launching separate antitrust probes into the company.
Demand for riskier assets pushed gold price lower by about 1%. Shares of gold miners such as Newmont Goldcorp and Barrick Gold Corp fell between 1% and 1.5%. (Reporting by Uday Sampath in Bengaluru; Editing by Anil D'Silva)